An Illinois homeowner filed a lawsuit against Wells Fargo & Co. Wednesday, alleging that the bank froze millions of dollars in home equity lines by falsely claiming that customers' property values had declined significantly.
The suit alleges that the bank failed to accurately assess the values of customers' homes before deciding there had been significant declines in value. It was filed by the KamberEdelson law firm on behalf of Michael Hickman, who said the limit on his home equity line of credit account was reduced because of an asserted "substantial decline" in the value of his home.
The suit alleges that Wells Fargo used unreliable computer models that produced artificially deflated home values and failed to give consumers proper notice of the credit reductions.
A Wells spokesman said the company was reviewing the lawsuit, but "our controls are based on contractual and regulatory guidelines and include a fair appeals process."